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BlueScope’s ‘frank’ missive to Ryan Stokes’ SGH was supposed to be an olive branch

The sharply worded letter to SGH and Steel Dynamics wasn’t intended to be a rebuff. But whatever happens next, a transaction involving the steelmaker is now more likely.

Brandon How and Hugo Mathers
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BlueScope’s aggressive letter could actual keep negotiations opens for longer. Darren England/AAP Image.

BlueScope chair Jane McAloon’s latest public spat with wannabe suitors SGH and Steel Dynamics was interpreted by the market as a signal the takeover deal is slipping away. But beneath the bluster could still lie a pathway to a transaction.

In a sharply worded letter lodged on the ASX on Thursday, McAloon outlined the ASX-listed steelmaker’s objections to the bidders’ latest proposal, arguing the “best and final offer" of $34 per share was effectively worth $31 per share once dividends the company has already promised to pay were taken into account.

BlueScope shares fell 2.3% to $27.71, their lowest level since SGH and Steel Dynamics lobbed their first proposal in January. For its part, SGH shares fell 2.7% to $46.48.

While the move in BlueScope shares suggested a lack of confidence in a deal getting done, a source close to situation said the letter was BlueScope’s attempt at saying “we want to be constructive”.